By Amy Silverman
By Olivia LaVecchia
By Monica Alonzo and Stephen Lemons
By Chris Parker
By Michael Lacey
By Weston Phippen
"The neo-prohibitionists are real active about trying to dry us up all the time," he told the Phoenix Business Journal. "They're a constant battle. They're going after us in different ways now than they did in those days, trying to ban advertising, things like that.... We're legislatively involved very heavily.... It's a way of life to protect our industry."
Since 1982, Hensley & Company employees have donated almost $200,000 to federal political candidates and campaigns. Since 1996, they've given Arizona state-level candidates more than $18,755.
McCain himself has received more than $60,000 from James Hensley and his employees -- and tens of thousands more from other beer-related interests.
John McCain benefits from James Hensley's money.
James Hensley benefits from John McCain's political power.
While McCain blasts his colleagues for falling prey to the influences of campaign contributions, the senator's record reveals his quiet support for the business that launched and has helped maintain his career. McCain declined to be interviewed for this story.
Liquor spirited from the Hensley brothers' warehouses helped fuel a lively nightlife at some of the Valley's most exclusive clubs in the mid-1940s. The Green Gables, the Silver Spur and the Cowman's Club were recipients of black-market shipments, according to testimony presented at the 1948 federal trial of the Hensleys and their two companies, United Sales Company in Phoenix and United Distributors in Tucson.
Jack Baldwin, a salesman and supervisor at United Sales, testified at the 1948 federal trial that Eugene Hensley regularly instructed him to draw up false invoices, transfer scores of cases of liquor offsite and deliver premium whiskeys to selected black-market clients.
Baldwin testified he was ordered by Eugene Hensley in September 1946 to kick in a door at the United Sales' warehouse on North 19th Avenue and take five cases of scotch for a black-market sale to the Green Gables.
In other instances, Baldwin testified that he took as many as 50 cases of whiskey from the United Sales warehouse and stashed them on the back porch of his central Phoenix home for later delivery to black-market buyers.
"I can name you 20 deals like that," Baldwin testified.
When an order came in for black-market whiskey, Baldwin would fill the bill.
"Well, the Green Gables wanted 10 cases of Canadian Club and the only thing I would do is just send down and get it, that is all there was to it," Baldwin testified.
To cover the illegal black-market sales, Baldwin testified that false invoices were prepared showing the liquor sold in small quantities to retailers throughout Arizona.
"It would be scattered over the state for two and a half and three cases at a time," Baldwin stated.
"Why would you make invoices that did not show the true fact situation?" Assistant U.S. Attorney Thurman asked.
"The liquor went someplace else," Baldwin stated.
"Under whose direction did you make these invoices?"
"Gene Hensley," Baldwin replied.
"After these were made out, these particular invoices, what did you do with them?"
"I took them home, burned them usually," Baldwin stated.
Information from the false invoices prepared by the Hensleys' employees was provided to federal liquor regulators with the Alcohol Tax Unit at the U.S. Treasury Department. When investigators compared the information reported by the Hensleys and what was actually delivered to retailers, they discovered a huge discrepancy.
Sometimes the Hensleys sold liquor to unlicensed individuals who would transport up to 55 cases at a time to states including Oklahoma and Utah. Carl "Kid" Carter from Ogden, Utah, purchased dozens of cases of whiskey at a time, loaded them into a late-1930s sedan, covering the illicit cargo with a blanket before heading home, 600 miles north.
"Sometimes he [Carter] would give me the money, and sometimes he would give Gene the money," Baldwin testified.
Before the liquor was loaded in Carter's car, Baldwin stated the federal serial numbers would be cut off the cases. Carter didn't have a liquor license in Arizona or Utah.
"Do you know what prices were paid, say, by Kid Carter?" Thurman asked Baldwin. "... Would they pay more than the ceiling price?"
"Oh, yes," Baldwin testified.
Carter must have been a prodigious drinker. He testified that he did make black-market purchases but wasn't trying to make a financial killing.
"I drank a lot of it and gave a lot of it to my friends," he told the court.
"Didn't you sell some of it?" Thurman asked.
Another United Sales employee, Howard Wesson, worked as a warehouseman and truck driver from 1942 through 1945.
Wesson testified that he occasionally loaded whiskey on the warehouse docks and removed the federal tax serial numbers at Gene Hensley's instructions.
"He just had it come off so there would be no trace of it, or something to that sort," Wesson stated. Wesson recalled loading 25 to 30 cases of liquor into Kid Carter's car and testified that Carter told him he had "doubled his money."
It wasn't unusual, Wesson testified, to leave cases of whiskey on the warehouse floor in the evening and return to work the next day to find the cases broken apart and the whiskey gone.
The heavy black-market sales made it difficult for employees to keep track of the liquor.